Succeeding in today’s market: Advice for buyers and sellers

The amount of property on the market in Perth has ballooned over the past six months. There are now 17,000 homes, units and town houses for sale on any given day. Although buyer demand is positive, it has not grown to match the recent dramatic increase in sellers coming on to the market. But as we know, the market can change from one week to the next. So how can buyers and sellers stay ahead of the curve?

At the height of the Western Australian property boom in 2006, there were as few as 5000 properties on the market day to day. This lack of supply, along with low interest rates, played a large part in creating the dramatic price increases that saw the median Perth house price soar above $500,000.

Today there is more than triple the number of properties for sale creating an abundance of housing, and with a steady number of properties entering the market every day, last quarter’s statistics show a current median sale price of $457,000.

This is having a flow on effect for sellers – their homes are staying on the market for an average duration of 71 days. This is far from ideal and leads to a compromised sales price.

So what can both sellers and buyers do in this current market to maximize their position. Here's some tips for both groups:

Sellers

Ideally, your property should sell while it is still “fresh” on the market, i.e. between 30-45 days. To ensure your agent is focused on this outcome, employ the following tactics:

• Insist on a bold, multi-media marketing campaign that showcases your property and generates buyer excitement – quickly in a crowded market

• Only sign up with your agent for 60-day authority. This is the prime window of opportunity in which to achieve a premium price. After 45 days on the market, your property will appear “stale” against new stock in your area

• Insist that your agent provide detailed written reports on buyer feedback and interest each week. This will help you tailor your campaign and make any necessary adjustments to the price or presentation of your property.

Buyers:

The current market is well suited to buyers, even if interest rates are the highest they’ve been for 10 years. Here’s what prospective buyers should be thinking about:

• There is a unique range of choice in Perth’s property market today with 50% more stock on offer than “normal”. Properties and opportunities that would not normally be available are being flushed into the market place

• Sellers are more likely to be reasonable in their price expectations and terms and conditions. Opportunities to buy “fairly’ are increased.

• There has been a lot of talk about interest rates and their steady increase over the past year, but with median prices decreasing at 2.7%* last quarter buyers need to see the clear offset in house price (savings that may be in the tens of thousands) against the interest rates which are now likely to remain steady for some time going forward.

Both buyers and sellers need to have a clear plan when entering the property market. A good agent will provide sellers with the most up to date information and statistics enabling the vendor to make realistic pricing decisions.

And buyers need to remember that the market can change very quickly – almost from one weekend to the next. The data we are seeing today is already “old” and if demand builds up again, the next rise in the cycle will kick in. Now is the ideal time for buyers to capitalise.

* Source: REIWA